In a renewed push for a ‘fast-paced’reciprocal trade agreement, the United States may be pressing India to fully open its $125 billione-commerce markettoAmerican retail giantslikeAmazonandWalmart, according to a report by the Financial Times.

The talks are part of a broader framework for India-US trade deal that is expected to cover multiple sectors, including food and automobiles. On April 2, Trump had slapped India with a 26 per cent tariff, which, however, has been paused for 90 days.

The push from the US likely includes a demand for a level playing field in e-commerce. India’s current regulatory framework makes US e-commerce firms act only like a marketplace where other sellers list products from toothpicks to drones for consumers of the world’s most populous country. However, the rules are different for Indian rivals who can manufacture, own and sell the products on their online portals. Washington calls this a “non-tariff barrier” while India also caps foreign direct investment in retail.

“Since 2006, the US has been trying to open up India’s domestic market, and has been stymied successfully ever since,” FT quoted Arvind Singhal, chair of retail consulting firm Technopak Advisors.

This comes amid US Vice President JD Vance’s visit to India where he met India’s Prime Minister Narendra Modi. India and the US have finalised the Terms of Reference (TOR) for a potential trade deal to guide the forthcoming negotiations.

Industry executives told the FT that the Trump administration has been working closely with US e-commerce platforms on the trade strategy.

Also Read: Flipkart gets board’s nod to shift domicile to India

According to the FT report, Walmart CEO Doug McMillon first raised this issue at Mar-a-Lago, during a meeting with Donald Trump. McMillon was also reportedly present at the White House earlier to discuss tariff-related concerns.

The trade issue has broader business implications. Reliance, India’s largest retailer, is emerging as a strong local competitor through its growing e-commerce platforms, bringing major US retailers like McMillon and Jeff Bezos into direct competition with Mukesh Ambani.

Walmart owns India’s Flipkart, while Amazon continues to expand its operations since entering the market in 2013. However, Amazon lags Flipkart in user base. Amazon had fewer than four crore daily active users in India late last year, compared to Flipkart’s five crore, according to Bank of America analysts.

Notably, India’s ‘unfavourable market conditions’ have also delayed Walmart-backed retailer’s IPO to late 2025 or early 2026. In the latest, Flipkart has moved its domicile from Singapore to India to further bank on tax benefits.

But for the US retailers, troubles are not restricted to just limited access to the market but also heavy crackdown by the Bureau of Indian Standards on their warehouses for possessing non-certified products.

“The attempt to pressure India into opening its ecommerce sector wider for American giants like Amazon and Walmart reflects a broader pattern of economic diplomacy aimed at securing market dominance for its corporations,” said Praveen Khandelwal, secretary-general of the Confederation of All India Traders and a BJP MP.

“While foreign investment is welcome, it must not come at the cost of distorting India’s retail ecosystem or undermining the interests of its [nine crore] small traders,” he added.

The US remains India’s largest trading partner, and the two countries have expressed interest in doubling bilateral trade of goods and services to $500 billion.